The product, which has yet to be named, will incorporate Dreamcast architecture and will be 100 per cent compatible with existing Dreamcast titles as well as offering high speed broadband connection and a high capacity hard disc drive.

"Consumers will be able to play network games as well as view TV shows and other entertainment content using this single product, with perfect ease and freedom," Sega claims in a statement. "This development will also allow Sega to go beyond the conventional console-dependent business and promote a new network business by providing network compatible content."

Sega's aim now is to "become the world's leading network gaming service provider". It plans to achieve this primarily through the licensing of Dreamcast architecture and the continued development of interactive network videogame content but also through narrow and broadband electronic services to the online community, and location-based amusement centres.

No release date for the first "Dreambox" has been set, although PACE has announced that it plans to show it off to the public on both sides of the Atlantic as early as February.

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